Hand-Wringing Over Stranded Assets
About half of all the world’s fossil fuel, i.e., the energy in the hydrocarbon bonds that resulted from hundreds of millions of years of life on Earth, has been harvested and burned over the last century or so–and it’s happening at an ever-increasing rate. That’s a scary thought. But here’s another one: What if you’re a major bank, say, the Bank of England, and you’re coming to terms with the fact that harvesting the remaining half may not be possible, given the realities of global climate change? What to do about this enormous quantity of “stranded assets?” As the article linked above suggests, this must make for some intense discussions.
Pictured: Bank of England governor Mark Carney speaking in August 2015. (Photo: flickr/cc)
Founders and investors running large asset management firms, like co-founder and chief investment strategist Jeremy Grantham, are beginning to come to grips with the reality of rising externalized costs associated with fossil sunlight. They’re increasingly acknowledging, and working to quantify, the threats those costs present to their investors’ assets, and the viability and sustainability of economies and growth models against that growing data set.
As that process moves forward, we’re seeing a gradual shift of the financial and political weight of such firms toward the mitigation of our collective disruption of our planet’s climate.
Exactly correct.
I certainly hope we soon see a favorable and rational outcome from the rising contest of economic titans.
On the one side stand the insurance and asset management firms (with their looming and growing exposure and vulnerability). On the other, those interests vested in fossil energy (and their resulting view of sustainable solutions as competition or unnecessary/excessive business costs).
The bell has sounded and the stakes are nothing less than the fate of human societies and the cornucopia of the biosphere on which we’ll always depend – far more than either side counts to their own till.
The clock is fast ticking, and delay favors the fossil titans.